Racism and redistribution

Lawrence White draws attention to an embarrassing fact - that welfare states are larger in countries that are racially homogenous.
He cites this paper (pdf) by Erzo Luttmer:

Individuals increase their support for welfare spending as the share of local recipients from their own racial group rises...Welfare benefit levels are relatively low in racially heterogenous states.

And there's this (pdf) from Brucer Sacerdote, Alberto Alesina and Ed Glaeser:

Racial animosity in the US makes redistribution to the poor, who are disproportionately black, unappealing to many voters.

And we could add this (pdf) from John Roemer and Woojin Lee:

Racism among American voters decreases the degree of redistribution that would otherwise obtain...We numerically compute that during [the period 1976-92] voter racism reduced the income tax rate by 11-18 percentage points.

This looks like a consensus supporting David Goodhart's view that there's a trade-off between ethnic diversity and the social cohesion that underpins redistribution.
I think this is embarrassing for the "right" as well as the "left." For the right, it suggests they haven't won the argument against redistribution to the extent that voter numbers and (in)equality statistics suggest. That's because voter opposition to redistribution is based not just upon respectable libertarian arguments, but upon despicable motives.
For the left, it suggests we can't have two of our cherished ideals - a liberal immigration policy and redistribution - and this might be the price we have to pay for what little redistribution we do have.
Is there a solution here? Is it a counsel of perfection to hope to solve the problem by educating people out of racism? Would a citizen's basic income - paid to citizens but not immigrants - allow us to combine redistribution with free immigration? Or are we stuck with the nasty trade-off?

Comments

[Curious]

Yes indeed. I must commend your honesty and willingness to discuss issues that many prefer to ignore (because they benefit somewhat from the current misallocation).

Keep it up

[Stevey]

Why is a liberal immigration policy considered to be an important leftist ideal? Given that by leftist you mean, "on the side of the poor", as oposed to the "unemployable middle class wanker" definition you gave last week. Are you saying that leftists should be on the side of the poor internationally, rather than locally - we should be encouraging the immigration of the poorest in the world, and considering the local poor as being undeserving rich by comparison? Is there meant to be some intangible benefit from having people of disparate cultures all mixed together in an orgy of mutual paranoia?

[Blimpish]

Re the Right, as you know I don't think that we do have a problem with more or less redistribution per se - just the motivation behind it.

Whether the motives are purely racist is a factor difficult to pull out. Most racially-diverse countries are also culturally-diverse (even African-Americans are quite culturally distinct, because of historic segregation, etc). If that's the case, then there's no embarassment at all about siding with those motives; preferring one's own culture and people (defined non-racially) is very much in keeping with being a conservative.

[Peter]

I'd ask the same question as Steve. I've never understood this liberal implication whenever immigration is discussed that a country is inherently inferior if it is mono-ethnic. In this case it's described as actually 'nasty' and 'embarrassing' to find we have any shortcomings when compared to them. It's a breathtakingly parochial attitude that just because Britain or the US has mass immigration then everyone else should, and deeply insulting to successful monoethnic nations like Japan.

[Blimpish]

Peter: I think the term normally applied is 'hideously white'... Oddly I've never heard a liberal say Nigeria is 'hideously black'.

[David Wildgoose]

Well done Blimpish, I keep saying exactly the same thing myself.

Let's face it, it's not difficult to decide whether something is offensive. Just substitute the opposite client group in the statement, and does the statement still sound acceptable?

[Curious]

Bottom line is that if coloniolism and the subsequent legacy that it left didn't happen, immigration talk would be on amicable terms. The problem is, most of those commenting here have missed the plot by miles. How many of you have stopped to consider the impact we in the west have had on developing countries?

That's right, none of you. Yes, you may have thought about the poor in poor countries and subsequently given your £2 to oxfam, but please, don't flatter yourself. Your donations are just but a drop in what needs to be an ocean.

The west's initial impact on the poor countries was extremely explitative. If it wasn't slavery (Africa Americans), it was plundering (developing country resources). In some extreme cases, it was both slavery and plundering.

We are now in the 21 century, how come the poor have not become rich?
For those of you curious enough I refer to the IMF and World bank loan policy. It has - economically - done more harm than good. It has left the developing countries still feeling marginalised and most importantly, enslaved.

So why can't poor countries just turn their backs on the west and do their own thing?
YOU WISH!!
What that question is really saying is, yes, the west has done all these things but we cannot - in this generation - be bothered to make ammends. Sod the poor, we really are selfish looters who pretend to be generous even when all those concerned can see through the thin vail of pretence.

We don't want to make ammends and in fact, we don't want those from poor countries coming over to make something of themselves and give their families a surviving chance.

What that question is stating is basically that we in the west don't care, don't ever want to care. Basically, the west saying to the poor:

"so your life is hard, so you got robbed and plundered, so you've been put into a box/poverty trap and can't get out because even when you sweat blood trying to make something of yourselve the west slaps on a tarrif that renders all your work useless and when you get an education the west refuses to recognise it...

...well tough"

That's what all the banter I've read so far precipitates. It doesn't matter how grammatically acrobatic you are, there are a million ways to say the same thing. Say something different for a change or say nothing at all.

[Blimpish]

Curious: that's all extremely interesting, but what's it got to do with the post or our "banter" in response to it? We weren't (or maybe I've misunderstood) discussing global development or the economic legacy of colonialism, but the impact of racial and/or cultural diversity on domestic policy consensus.

[chris]

I regard free immigration as a leftist policy because it helps the poor in poor countries, and because it's a potential Pareto-improvement for richer countries; the poor in the UK could therefore benefit, if the right redistributive measures were in place.
Personally, I wasn't thinking immigration is leftist because it promotes ethnic diversity - though of course some others would see it this way.

[Blimpish]

But would there be any domestic political constituency in favour of immigration if its benefits were redistributed to the domestic poor? After all, some of its strongest supporters are business interests - if you taxed away the benefits they gained, would they care much either way? And would the poor be that supportive of something that you can only (though supportive) say is a potential Pareto improvement.

[Peter]

It would be interesting to do a study into whether we don't already tax away any gains businesses get from importing the world's poor and paying them poverty wages. The price, after all, is the domestic poor moving onto a welfare state, which businesses must help fund through taxation, because they aren't willing to clean toilets for the paltry wages on offer.

[Stevey]

It is not a pareto-improvement if there is a single racist bastard out there who would pay more than your expected dividend to keep 'em out.

I think you might have a chance at achieving that at say 10,000 GBP per cap per annum or so.

[Monjo]

Free immigration is economically right-wing surely? Promotes cheap labour and reduces the intelligence pool of the poor countries. "Brain drain".

How does France (quite a racially/nationally diverse country) and Japan (most homogenous country in the world) fit onto your model? Or is the comparison really just Norway/Sweden vs UK vs US? And an attempt to US-bash?

Curious: You're just so wrong on so many levels. Primarily of that is that we NEED/SHOULD/OWE aid/wealth-giving to Africa. We do not. Most Africans would rather we hadn't given them so much aid/loans.

European colonialists did not exploit China the last time I checked my history books, yet in 1950 the average African country was richer than China, but is now far behind. It had been Africa post-colonialism/empire that has destroyed it economically.

[Curious]

Hey Monjo, thanks for your criticism but I fail to see where I've gone wrong. Perhaps you can shed some more light.

Your comments:
1."Free immigration is economically right-wing surely?" don't make sense at the moment. Right wing is usually racist isn't it? So, given the fact (if I'm right) how can racists "like" or "promote" free immigration?

2."Promotes cheap labour and reduces the intelligence pool of the poor countries. "Brain drain"."
Because I am exhausted from commenting on "brain drains", I won't refer you to something I wrote. I will refer you instead to facts from another horses mouth. See "Brain drain - Chit chat for the brain dead" here: http://uhurunihaki.blogspot.com/2005/06/brain-drain-chit-chat-for-brain-dead.html

3. "How does France (quite a racially/nationally diverse country)". France is racially diverse but also quite racist. Do your research, it's not a secret.

4. "Curious: You're just so wrong on so many levels. Primarily of that is that we NEED/SHOULD/OWE aid/wealth-giving to Africa. We do not. Most Africans would rather we hadn't given them so much aid/loans."

I would normally respond to this quite enthusiastically BUT your stance that we basically owe Africa nothing puts me off. I'll leave you to your equilibrium. How can you say "Most Africans would rather we hadn't given them so much aid/loans."? Don't confuse aid and loans, there is a BIG difference and moreover, the TERMS of financial assistance is what has been in contention not the assistance all together. See Martin Wolf's comments regarding aid (Financial Times), then we can have a decent dialogue.

5. "European colonialists did not exploit China the last time I checked my history books, yet in 1950 the average African country was richer than China, but is now far behind. It had been Africa post-colonialism/empire that has destroyed it economically."

Where do I begin,....compare and contrast the nature and impact of colonialism on China (on one hand) and Africa (on the other). Therewithin lies fact that voids your comment.

Thank you.

[Curious]

Blimpish: Hello to you too.
The title is "Racism and redistribution", isn't it?

What I've done here is basically try to delve deeper into the causes - where is all begun - as it were. Furthermore, the reason for my long comment was because I saw the discussion turning into another session of grammatical acrobatics with no net worth.

Chris sends out very interesting commentaries and it flows that the comments left should add to that, not detract from it.

[Monjo]

1- No. Do not confuse economic policies of the right (free-market, privatised) and the left (socialist, state-controlled) with terms like "far-right" meaning racist. That's the trouble with a left/right terminology. We're talking economics, not racial policy.

2- There is the issue: which is more important - skilled labourers, doctors etc working to directly improve the well-being of a country OR working abroad and sending money home?
If you need to bake a cake, you can have all the ingredients, but if there's no-one who knows how to do the baking, you're stuffed.

I read the article to which you linked. Or skimmed it. Seems the issue is £$€ and opportunity.
To me the 'brain drain' is not FROM Africa but within the UK. If we can cheaply/easily take trained nurses from Africa it means we can train less of our own. Rather than encourage young British unemployed to do the training we just import.

3- Yes France may have racism. Was not the point. It has racial diversity (far more than the UK, and in some regards almost as much as the US) but also has a very large welfare state and plenty of wealth redistribution.

4- Yes aid and loans are different. Africans want free trade and investment, an opportunity to compete.

5- How? Africa was better off than China post-Colonialism and was left with a far better infrastructure. It was a continent of plenty and of great wealth.
It was civil wars and corrupt leaders that ruined Africa NOT colonialism.
It will therefore be military peace and stable governments who are open and accountable that will turn Africa around.

There are still black African nations with better GDPs than China and others with equally strong economic growth. But since they don't have 1200 million people they don't get as much news attention.

[Curious]

Monjo,

Thanks for your comments, much appreciated.

Your point 2: Which is better.....?

To answer that question is to suggest that things (life) is black and white. The answer that I can provide would have to be under ceteris paribus conditions. The reality is that globalisation, politics, political economy, global institutions and government-level corruption and the absense of ethics in international conglomerates void the ceteris paribus condition.

Let's not forget, in the 1980s and 1990s – when commodity prices collapsed and debt soared – African governments had to cede control over their economic decision-making in order to qualify for World Bank and IMF loans. Conditions attached to these loans undid much of the progress in public health. Food subsidies were scrapped, health budgets slashed and services privatised.

Further to this, there is even one example where a developing country has nurses but can't employ them because the World bank has an issue with its overall level of wages and salaries bill. This is one of those
countries experiencing "brain drain".

So, do you see how comeplex this is? Your question 2 should not be raised in such a simplified manner.

I am fine with all else but point 5. Perhaps I will provide you with my research (paraphrased) either here (in another response) or at your blog.

[curious]

One more thing monjo, African's don't want free trade right now (see infant industry theory - development economics), fair trade would be of most benefit at this/their current juncture.

[Monjo]

Of course, no issue is so simple, Black and White, I was just asking a simple question - which like any good politician you dodge.

I would be interested in your research about a comparison of China vs Africa (from say 1950 onwards). I would maintain my belief that I am right, but am open to eividence of the contrary.

Finally, I am going to maintain that Africans do want free trade. I am not an advocate of 'fair trade', I doubt you'll find too many people at this blog who are. Fair trade does nothing about import quotas, restrictions and taxes; what it does do is pay a 'fixed' price for a certain commodity to provide the producer with a set income. However, it also sets strict quotas on the production from a particular farmer.